Report: The Future of MVNOs in the 3G Era

Authors: Alastair Brydon and Mark Heath with Katrina Bond (Analysys Research)

Publication date:  June 2005

“3G will fuel the number and diversity of MVNOs, and all mobile operators have something to gain. However, mobile operators may find themselves vying not just for the loyalty of individual customers, but also for MVNOs that have millions of customers" Dr Alastair Brydon

Product overview

With over 100 Mobile Virtual Network Operators (MVNOs) launched since 1999 in Western Europe and over 30 present in the USA, mobile operators cannot ignore the impact that MVNOs are having on the market. MVNOs are taking significant market share (nearly one quarter of customers in Denmark, for example), and are increasing churn and subscriber acquisition costs in many markets. Also, because most MVNOs to date have focused on offering discounted voice services, they have increased price competition and lowered ARPU.

Regulatory environments are encouraging more MVNOs in developed mobile markets, but their relationships with mobile operators are changing substantially in the new 3G era. Mobile operators will need to develop strategies that maximise the benefits and minimise the threats of a new wave of MVNOs: record label Universal Music has established an MVNO in France, TV channel M6 and radio station NRJ each plan to set up MVNOs in France, and sports content provider ESPN (indirectly owned by Disney) plans an MVNO in the USA. A number of data-only MVNOs have also emerged, including the Earthlink MVNO in the USA, with services designed to support mobile PCs and data devices such as the Blackberry.

These companies are among more than 50 profiled in the report (see Contents), in order to explain the impact of MVNOs to date, illustrate emerging trends, and demonstrate strategic lessons. The report also provides case studies of the development of MVNOs in country markets of Denmark, France, UK and USA, including details of all MVNOs in those countries.

The Future of MVNOs in the 3G era answers your key questions:

• What has been the impact of MVNOs on market shares, ARPU, churn and customer acquisition costs?
• What can we learn from MVNO activity to date?
  How will 3G networks change the MVNO landscape, in terms of the number, types and industry impact?
• What new types of MVNO will emerge to take advantage of 3G, and how will this affect mobile network operators and existing MVNOs?
• Why are content owners, media channels and business-focused service providers interested in becoming MVNOs, and why should mobile network operators consider hosting them?
• What types of organisation are best placed to become MVNOs in the 3G era?
• How must existing MVNOs, new 3G entrants and established mobile operators modify their MVNO strategies within the context of 3G?